PPI Components Deliver Mixed Results

Monthly output prices for producers in the Mining & Quarrying industry increased by 0.5% for September 2024 relative to August 2024, while prices in the Manufacturing industry fell by 0.6%.
The upward movement in the index for the Mining and Quarrying industry reflects a 0.5% increase in the index for the major group ‘Bauxite Mining & Alumina Processing’. The other major group, Other Mining & Quarrying’, increased by 0.1%. The depreciation of the Jamaican dollar relative to the United States dollar was the primary factor contributing to these increases.
On the other hand, a 4.5% decrease in the index for the major category ‘Refined Petroleum Products’—given lower crude oil prices in the international market—was the primary factor behind the decline in the Manufacturing industry index. However, this overall decrease was offset by a 0.3% increase in the index for the major group ‘Food, Beverages & Tobacco.’ This increase was mainly driven by rises in the indexes for the categories ‘Manufacture of Other Food Products, (0.5%) and ‘Manufacture of Beverages and Tobacco (0.5%), resulting from general price increases and higher raw material costs.
For the period September 2023 – September 2024, the point-to-point index for the Mining & Quarrying industry increased by 8.1%, and the point-to-point index for the manufacturing industry fell by 0.9%, reflecting the year on year decline in international oil prices.
The Producer Price Index (PPI) is a significant economic indicator that tracks the average fluctuation in selling prices that domestic producers of goods and services experienced over time. Currently, the only industries being tracked are Manufacturing Industry and Mining and Quarrying.
That said, with international oil prices being a key driver of the ‘Refined Petroleum Products’ category, escalating geopolitical tensions could impact the Manufacturing industry index in the near-to-medium term, if they result in a material rise in oil prices.

(Source: STATIN & NCBCM Research)